By CLIFFORD KRAUSS and CHRISTINE HAUSER
Oil Prices Threaten Prices at the Pump as Libyan Upheaval Shakes World Markets
HOUSTON — The political turmoil sweeping the Arab world drove oil prices sharply higher and stocks much lower on Tuesday despite efforts by Saudi Arabia to calm turbulent markets. The unrest that has spread from Tunisia to Libya pushed oil prices to a two-year high and has spurred an increase in gasoline prices. The specter of rising energy costs and accelerating inflation in turn unsettled investors.
Oil is now at a price not seen since the recession began, and it is more than $20 above goals set in recent months by Saudi officials as strong enough to satisfy the top producers but not so strong they might suffocate the global economic recovery.
Although there are still plentiful supplies of oil and gasoline in the United States and in much of the world, American consumers are now paying an average of $3.17 a gallon for regular gasoline, a steep rise of 6 cents a gallon over the last week, according to the AAA daily fuel gauge report. With consumers paying roughly 50 cents more a gallon than a year ago, analysts are warning that prices could easily top $3.50 by the summer driving season. ...
Saudi Arabia’s oil minister sought to reassure the markets on Tuesday, saying that OPEC was ready to pump more oil to compensate for any decline. At least 50,000 barrels a day of output has already been halted in Libya. That is only a fraction of the country’s production, but with foreign oil companies beginning to shut down operations and evacuate workers and with local ports closing, more output could be lost.
“OPEC is ready to meet any shortage in supply when it happens,” the Saudi oil minister, Ali al-Naimi, said at a news conference after a meeting of ministers of oil producing and consuming nations in Riyadh, Saudi Arabia. “There is concern and fear, but there is no shortage.”
http://www.nytimes.com/2011/02/23/business...
Oil is now at a price not seen since the recession began, and it is more than $20 above goals set in recent months by Saudi officials as strong enough to satisfy the top producers but not so strong they might suffocate the global economic recovery.
Although there are still plentiful supplies of oil and gasoline in the United States and in much of the world, American consumers are now paying an average of $3.17 a gallon for regular gasoline, a steep rise of 6 cents a gallon over the last week, according to the AAA daily fuel gauge report. With consumers paying roughly 50 cents more a gallon than a year ago, analysts are warning that prices could easily top $3.50 by the summer driving season. ...
Saudi Arabia’s oil minister sought to reassure the markets on Tuesday, saying that OPEC was ready to pump more oil to compensate for any decline. At least 50,000 barrels a day of output has already been halted in Libya. That is only a fraction of the country’s production, but with foreign oil companies beginning to shut down operations and evacuate workers and with local ports closing, more output could be lost.
“OPEC is ready to meet any shortage in supply when it happens,” the Saudi oil minister, Ali al-Naimi, said at a news conference after a meeting of ministers of oil producing and consuming nations in Riyadh, Saudi Arabia. “There is concern and fear, but there is no shortage.”
http://www.nytimes.com/2011/02/23/business...
